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July 10, 2014          Get Retirement News  |  Advertise
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[Guidance Overview]

Wellness Plan and Mental Health/Substance Use Disorder Parity -- Effective Dates Have Arrived!
"Check the applicable year for all of your health plans and policies immediately! For July 1 plan or policy years, contact your advisors to make sure that your plans and policies currently comply with the new MHPAEA and wellness rules. For all other plan or policy years, work with your advisors to make sure that your plans and policies will comply with [these] rules by the start of your next plan or policy year." (Mintz Levin)  


[Advert.]

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[Guidance Overview]

One-Month Orientation Period Will Provide Relief from the 90-Day Rule
"[T]he final regulations do not address whether, in order to be 'bona fide,' an orientation period must apply to all benefits, be tied to a formal probationary period or appear in the employer's handbook. Conservative employers may want to develop an across the board orientation-period policy to eliminate the perception that its sole purpose is to delay health plan enrollment." (Nixon Peabody LLP)  

De Facto Plan Administrator Claims in the First Circuit
"Plan insurers can still help to insulate themselves from improper penalty claims. When a claim is denied, counsel representing claimants frequently send 'kitchen sink' requests for documents, requesting both plan and claim documents from the insurer. A plan insurer receiving such a letter should respond to the request letter by stating that it is not the plan administrator and is responding only as the claim fiduciary ... Otherwise, if there are plan documents included in the claim materials that are provided (and an insurance policy is a plan document), the claimant may argue that the insurer assumed the duties of the plan administrator[.]" (Wilson Elser)  

How Many OPEB Trusts Does a Local Governmental Employer Need?
"[With] only one trust, ... everyone shares in the same funding -- regardless of whether they are contributing the same amounts and whether they are withdrawing the same levels of benefits. If asked about it, most unions would not be willing to share their retiree health trusts with a number of other unions. What can be done? By far, the easiest thing to do is to establish multiple OPEB trusts (or, OPEB sub-trusts)." (Focus on Public Benefits)  

Embracing Consumer-Centric Benefits
"Whether the decision-making resides with employers, consumers, or providers, rational, informed choice is a necessary condition of an efficient market and is sorely deficient in the American healthcare system. Consumer-centric benefits promises to fill that void. Consumers who embrace consumer-centric benefits will have a competitive advantage. They will have the opportunity to make wiser health choices. They will gain greater clarity on assets needed to fund healthcare during retirement. Perhaps they will be able to use this advantage to retire earlier and become less dependent on government benefits -- which may or may not be available to future generations." (Healthcare Reform Magazine)  

Medicare's Spending Per Beneficiary Increased Twice as Fast as Spending by Employer-Based Plans in Ten Years
"On average, all U.S. employers spent $3,430 per covered life on health care in 2012, up 13.6 percent from 2003 after adjusting for inflation. On average, large U.S. employers (1,000 or more employees) spent $4,990 per covered life on health care in 2013.... Medicare spent $10,830 per covered life in 2012, up 28.2 percent from 2003 after adjusting for inflation; The average cost of [all] government health care spending per covered life has risen almost 30 percent since 1995 after adjusting for inflation, from $7,040 to $9,130." (Health Policy Blog, by the National Center for Policy Analysis)  

Blue Cross' $65 Billion Move Away From Fee-For-Service Medicine
"In the latest blow to fee-for-service medicine, the nation's Blue Cross and Blue Shield plans say they are spending more than $65 billion annually -- about 20 percent of the medical claim dollars they pay -- on 'value-based' care that rewards better outcomes and keeps patients healthy.... [T]he contracts with providers ... include 'pay for performance programs,' 'episode-based payment programs,' 'patient-centered medical homes' as well as so-called accountable care organizations (ACOs), a rapidly emerging health care delivery system that rewards doctors and hospitals for working together to improve quality and rein in costs." (Forbes)  

California Customers Sue Blue Cross, Alleging Misrepresentation of Doctor and Hospital Networks
"Blue Cross vastly misrepresented the size of its physician and hospital networks and other key health plan contract terms in order to increase sales during the [ACA's] 'open enrollment period' that ended on March 31, [alleges] a new California class action lawsuit ... The lawsuits allege that Blue Cross misrepresented so-called 'Exclusive Provider Organization' (EPO) health plans that are similar to HMOs, with no out-of-network coverage and benefits, as Preferred Provider Organization (PPO) plans, which provide out-of-network coverage and benefits." (Consumer Watchdog)  

[Opinion]

How Well Is the ACA Working?
"[T]here is still plenty that remains unknown about the ACA, and it will take years for the law to fully play out and to get a complete evidence-based reckoning of how it is working.... The preponderance of the evidence, however, suggests that insurance is now more affordable on average than it was before the ACA's implementation ... A large tracking poll from Gallup shows that the percentage of adults who say they are uninsured is down from 17.1% in the fourth quarter of 2013 to 13.4% today." (Larry Levitt, in the JAMA Forum)  

[Opinion]

Google Co-Founders: 'Thanks, But No Thanks'
"On the face of it, it's pretty amazing that a company that doesn't think twice about tackling absurdly challenging scientific projects ... is brought to its knees by the prospect of dealing with the byzantine regulation around healthcare ... The challenge is that to this point, the benefits of technology generally seem less than persuasive .... More directed examples of instances where technology could immediately impact lives, and could impact more were it not for oppressive regulation, would go a long way to rolling back the regulations that seem to impede progress." (The Health Care Blog)  

Benefits in General; Executive Compensation

IRS Revenue Ruling Permits Deferred Comp Opportunities for U.S. Fund Managers of Offshore Hedge Funds
"The Ruling provides U.S. hedge fund managers with flexibility in structuring their compensation arrangements with offshore vehicles. For example, Options and SARs can be structured to lock a fund manager's incentive compensation into the value of the fund itself for a fixed number of years or upon the occurrence of certain events (e.g., the exiting of the investor) by agreeing in advance when the Options or SARs will be exercisable. By effectively allowing multi-year fee deferrals, the Ruling permits investors to better align their interests with the fund managers, without investors asking for a clawback of fees." (Haynes and Boone, LLP)  

Will Dodd-Frank Clawbacks Lead to Mandatory Deferrals of Incentive Compensation?
"If a deferred, vested bonus is scheduled to be paid at a fixed date, could a forfeiture of that deferral to satisfy a clawback of the bonus be deemed a prohibited acceleration under 409A? We would hope this rule would not apply because this is a forfeiture of an item of deferred compensation rather than an early payment subject to the prohibited-acceleration rule. The outcome may be less certain if a deferred bonus is forfeited at least in part to satisfy a clawback of other compensation (e.g., equity gains)." (Towers Watson)  

The Benefits Federal Employees Love Most
"The good news for federal employees is the things that are most important to them -- [the Thrift Savings Plan and the health and wellness programs under the Federal Employees Health Benefits Program], as well as the Federal Employees' Group Life Insurance Program -- are increasingly meeting their needs. The bad news: Fewer respondents in 2013 said other benefits were satisfactory compared to 2004." (Government Executive)  

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